If you have suffered losses due to investments, you need to explore your legal options for recovering your financial loss. Taking legal action against brokers, brokerages, and investment advisors can be complicated. It is essential to retain an investment fraud attorney who understands the ins-and-outs of securities laws and the legal process used to file claims against investment professionals. Finding a lawyer with the right credentials is difficult, but Zamansky LLC has the experience and resources to help you prove your case.
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Signs You Have a Claim for Investment Fraud
You may have a claim for damages caused by investment losses if:
- A broker or financial advisor suggested unsuitable high-risk investments. Brokers and advisors are expected to know their customers and recommend investments that are consistent with their customers’ risk tolerances.
- A broker or financial advisor engaged in churning. Excessive trading in your account can cost you money in commissions and fees and make it difficult to experience gains. Churning your account is a breach of fiduciary duty which may be actionable.
- A broker or financial advisor executed unauthorized trades. It is improper and illegal for a broker or advisor to make trades in your account without your explicit authorization.
- Your portfolio was over-concentrated in a particular investment type. It is the responsibility of money managers to diversify portfolios to reduce risks to investors. When a money manager fails to properly diversify your investment portfolio, the manager may be liable if your portfolio declines in value.
- You paid large commissions while your investments lost money. Your investment advisors or brokers may have been focused on their own commissions rather than making sound investments on your behalf.
- High risk private placements were sold to you. Private placements routinely advertise high rates of return in offering memorandums, while downplaying risks of loss of capital. Broker-dealers should only recommend and market high risk private placements to investors who can afford the loss of capital.
- Highly-leveraged ETFs were sold to you. Volatile markets can result in big losses with highly-leveraged ETFs (exchange-traded funds) and leveraged ETFs are inherently riskier than their un-leveraged counterparts. Only sophisticated investors who can afford to sustain losses and manage the risks of highly-leveraged ETFs should be sold this investment product.
The SEC also points to red flag indicators specific to oil and gas scams, including sales pitches promising “can’t miss” or “completely safe” wells and marketing tactics using highly publicized news items.
Additionally, investors who were promised unrealistically high rates of return, and those who were sent unsolicited materials, may also have been the target of deceptive marketing and inappropriate sales practices — such as one of our largest investigations: yield enhancement strategy losses.
Common Investment Fraud Scenarios
As seen with the above, the term “investment fraud” can mean many different things. It includes Ponzi schemes, unauthorized trades, account churning, and the failure to accurately describe the risks of a recommended investment, among other types of misconduct.
Ponzi schemes are a type of investment fraud in which the fraudster attracts investors with the promise of steady earnings, but in reality pays out the “earnings” using money received from newer investors. Probably the most notorious Ponzi scheme was committed by Bernard Madoff. There are certain “red flags” that can alert investors to the possibility that they have invested in a Ponzi scheme. For example, if a financial advisor promises—and delivers—unusually high or steady returns, no matter what the market conditions, that is a reason to be cautious. No investment strategy is perfect and if the results that are promised or delivered seem too good to be true, it’s time to ask questions. Another warning sign is if the investment advisor cannot clearly explain the strategy he or she is employing or explains that it is “proprietary” or a “black box.” If you think you have been a victim of a Ponzi scheme, speak with an experienced investment fraud attorney at Zamansky LLC.
Unauthorized trades are trades undertaken by your financial advisor without specifically discussing the trades with you or without having received written authorization to exercise “discretion” over your account.
Account churning occurs when your financial advisor engages in trading designed to maximize fees and commissions received by the broker, rather than to generate a positive outcome for you, the investor.
Every investment involves risk. A failure to properly describe an investment occurs when a financial advisor emphasizes the potential benefits of an investment without honestly disclosing the risks. This can occur in many different circumstances and, as with most things in life, always keep in mind that if an investment sounds too good to be true, it probably is.
If the investment fraud was committed by someone other than a financial advisor at a brokerage firm—for example a bank, a company issuing stock or other securities or a hedge fund—then the victim can bring a proceeding in state or federal court. The case can be brought either as an individual case or as part of established securities fraud class action. A detailed discussion of our class action practice can be found here.
There are federal and state laws, as well as rules issued by the Financial Industry Regulatory Authority (FINRA), to prevent financial advisors and other financial industry professionals from committing investment fraud against their clients. Under these laws, victims have different legal remedies depending on what type of investment fraud has taken place.
What to Look For in an Investment Fraud Attorney
Investment fraud cases require an understanding of all of the laws applicable to brokers and financial transactions. To increase your chances of success, it is important to seek a lawyer who has focused his career on securities fraud and who understands the types of legal arguments that can be made against broker-dealers and investment professionals. Often, complex transactions and financial rules come into play in investment fraud cases. Your investment fraud attorney needs to be able to explain in laymen’s terms what happened, why the investment advisor’s behavior was a breach of legal duty, why you are entitled to compensation for losses and the strategy for pursuing recovering.
Zamansky LLC attorneys have more than six decades of combined experience with securities and investment fraud cases and have handled cases nationwide. Investment fraud is the primary focus of our legal practice and we have helped investors stand up to some of the largest brokerage firms in the country to fight for recovery of their financial losses. We represent individual and institutional investors, and we have served as lead counsel in large class action cases in which groups of investors seek to remedy wrongs committed against them by financial professionals.
Zamansky LLC is more than just a securities and investment fraud firm. We are dedicated to representing oil and gas investors and are actively investigating oil, gas and energy-related investment losses. Our investment fraud attorneys know how to handle these cases and are on the cutting edge of the industry.
Why Choose an Investment Fraud Attorney at Zamansky LLC
Securities litigation is complex. It is important to retain legal counsel who is knowledgeable about the securities market and the laws that govern securities trading. The speculative nature of the junk bond market further complicates litigation in this area and requires a heightened level of strategy and insight.
Our investment fraud attorneys have the knowledge necessary to conduct a thorough investigation and to present complex evidence. We aggressively pursue legal action against sophisticated financial advisors, brokers and the top brokerage firms in the country.
Strategic advantages offered by Zamansky LLC include:
- Successful recovery of millions of dollars for hundreds of clients*
- Law firm founder with 30 years of experience in securities litigation
- Substantial experience in FINRA arbitration, the primary dispute resolution method
- Substantial experience in class action securities litigation
- Hands-on approach to effectively resolve disputes and recover losses
- In-depth knowledge of the securities market and laws
- Advocates at the forefront of Wall Street regulatory efforts
Our firm has taken on some of the giants in the securities industry and handled high-profile, landmark securities litigation. We are currently working on important investigations which will likely lead to class action lawsuits, arbitration and settlement negotiations.
Due to our reputation, our attorneys sought-after expert commentators in national news media, including CNBC, CNN, and FOX Business News, The Wall Street Journal, Financial Times and USA Today.
Contact Us Today
Our website includes in depth information on specific types of investment fraud. We strongly encourage you to read this information to gain a fuller understanding of what financial advisors may and may not do. If you have questions, or suspect your financial advisor has committed any type of investment fraud, contact our investment fraud law firm today for a free consultation with an investment fraud attorney.